This is insane, but not anywhere nearly as in sane as the federal government being in the loan business, in the first place. The federal government has no more business giving loans - taxpayers' money - to people with non-existent credit ratings, unproven credit risks, scant hope for full repayment, than it is in the business of giving free lunches and free baby-sitting services that should be the responsibility of parents who care.
Insane, though, this may be, do it, just this once - after all you did it for the producers of domestic junk, known as cars and solar panels - and then get out out of the student loan business for good.